summary report 66th Annual Meeting of the Southern Legislative Conference

Charleston, West Virginia | July 28 - August 1, 2012

Southern Legi sl ative Conferen c e o f T h e C o u n c i l o f S t a t e G o v e r n m e n t s

August 2012 From the 2011-2012 SLC Chair

Inside: From the Chair...... 2 Hunger in the South...... 3 SLC & Committee Leadership...... 4 Program Highlights...... 5 Meeting Summaries Agriculture & Rural Development. . . . 6 Economic Development, Transportation & Cultural Affairs. . . . 8 Education...... 10 Energy & Environment...... 12 Fiscal Affairs & Government Operations...... 14 Human Services & Public Safety. . . . .15 Legislative Fiscal Plenary...... 16 gulf Coast & Atlantic States Regional Task Force...... 18 Legislative Service Agency Directors Group...... 19 technical Tours...... 20 Conference Notes...... 21 Sponsors...... 23 Host State Committee & Staff...... 23 SLC 2013 » Mobile, Alabama...... 24

Southern Legislative Conference

of

The Council of State Governments

P .O . Box 98129 Atlanta, Georgia 30359 404/633-1866

www .slcatlanta org.

Serving the south Representative Keith Ingram, Arkansas, SLC Vice Chair 2011-2012, and Speaker Rick Thompson, West Virginia, SLC Chair 2011-2012 2 The SLC Annual Meeting Takes on Hunger in the South

Recently, the United States Department of Agriculture de- termined that 48 .8 million Americans, including more than 16 million children, are classified as food insecure, meaning they are not able to acquire nutritious food regularly and often face hunger . According to Feeding America, in West Virgin- ia alone, 271,750 residents, 14 7. percent of the state population, face food insecurity .

In response to this national crisis, which disproportionately affects Southern households, the Southern Legislative Confer- ence (SLC) of The Council of State Governments established the “SLC/Mark Norris Campaign Against Hunger” project .

This year’s community service food packaging event brought together nearly 200 annual meeting participants to assem- ble 20,000 meals to be distributed to families in West Virgin- ia . The event helped restock the two largest food banks in the state after inventory dropped dangerously low following the severe storms that paralyzed the state in late June . These food banks sustained families whose food had spoiled as a re- sult of power outages and those who had to temporarily relo- cate to shelters .

The “SLC/Mark Norris Campaign Against Hunger” is one of several packaging events coordinated by Outreach Inc ,. a nonprofit based in Iowa whose mission is to provide safe wa- ter, food, medical care and education to children and those in need at home and abroad .

In addition to the packaged meals, both the Mountaineer and Huntington Area food banks received a $1,000 .00 donation from the Southern Legislative Conference of The Council of State Governments . An additional $1,500 .00 donation was made to Outreach, Inc .

3 2012-2013 Conference and committee Leadership conference Leadership

Speaker Mike Hubbard Representative Keith Ingram Speaker David Ralston Speaker Rick Thompson Alabama, Chair Arkansas, Chair Elect Georgia, Vice Chair West Virginia, Immediate Past Chair Committee Leadership Agriculture & Rural development economic development, transpotation & Cultural affairs

Senator Joey Pendleton Representative Andy Anders Senator Bill Sample Senator Jeff Mullis Kentucky, Chair Louisiana, Vice Chair Arkansas, Chair Georgia, Vice Chair education energy & Environment

Representative Sara Thomas Senator John Unger II Representative Denny Altes Representative Bill Sandifer Mississippi, Chair West Virginia, Vice Chair Arkansas, Chair South Carolina, Vice Chair fiscal affairs & Government operations human services & public safety

Representative Randy McDaniel Senator Roman Prezioso Senator Emmett Hanger, Jr. Representative Joni Jenkins Oklahoma, Chair West Virginia, Vice Chair Virginia, Chair Kentucky, Vice Chair GULF COAST & ATLANTIC STATES REGIONAL TASK FORCE lEGISLATIVE sERVICE aGENCY dIRECTORs Group

Jerry Bassett, Director Senator Dan Soucek Legislative Reference Service North Carolina Alabama Presiding Officer Chair

4 Program Highlights

Opening Plenary SLC/Mark Norris Homer hickam Campaign Against Hunger

The South and the nation are seeing signs of recovery, but the fragility of the economy and the challenges ahead re- quire careful and deliberate attention to the policy deci- sions states must make. During four days in July, meeting in Charleston, West Virginia, legislators from across the South joined together with policy experts to discuss, review, and consider the op- portunities that exist to bring prosperity and promise to states and communities in the region . In addition to presentations and dialogue on substantive issues, each standing committee of the Southern Legislative Conference conducted a roundtable discussion and summary of legislative ac- tivities from the 2012 session, elected officers for the committee, and considered any policy positions that were presented for adop- Closing Plenary tion by members . Presentations from committee sessions, where available, and attendance lists for committee sessions can be found Mark Kennedy Shriver & Jennifer Garner on the SLC website at www.slcatlanta.org/WV2012 .

Education Committee Legislative Fiscal Plenary Robert L. King, President, Kentucky Council on Postsecondary educucation & Terry Holliday, Ph. D., Bill Hazel, M.d., secretary of health Commissioner of Education, Kentucky and human services, virginia 5 Agriculture & Rural Development Committee meeting summary

Sunday, July 29 invasive Species G. Keith Douce, Ph.D., Co-Director, Center for Invasive Species & Ecosystem Health, University of Georgia farm Bill Update Bob Tabb, Deputy Commissioner of Agriculture, West Virginia Representative Terry England Monday, July 30 Georgia, Chair 2011-2012 Ag Trade and State Trade Promotion Charles Green, Director of Marketing & Development, Department of Agriculture and Invasive Species Consumer Services, Virginia Invasive species are plants, animals, insects Impact of Herbicide Resistant Weeds or other species that are not native to an eco- Bob Nichols, Ph.D., Senior Director, Agronomy, Weed Control, Cotton Incorporated, system and whose introduction causes or is North Carolina likely to cause economic or environmental harm or injure human health . Not all exotic Given the huge number, extensive scope and Farm Bill uPDATE species are invasive – about 98 percent of u .s . vast damage of invasive species, it may be food production is from introduced species . tempting for citizens and policymakers to The Farm Bill, which sets farm policy at the It is the potential to do harm that distinguish- view the presence of an interloping plant, an- federal level, must be reauthorized by Con- es an invasive species from an exotic one . imal, insect or other pest as a lost cause, but gress every five years . The process for reau- there are excellent examples of how states thorization remains very fluid . The Senate With respect to invasive species, prevention have taken action to control or mitigate the passed a Farm Bill out of both the Agricul- is superior to eradication or controls . With impact of invasive species . A major effort in ture Committee and the full Senate in June plants, the characteristics which make for Georgia to control cogon grass reduced the 2012, proposing to eliminate direct payments a desirable ornamental variety – hardiness, number of active spots in the state by 62 per- to producers and replace this safety net with ease of propagation, attractiveness to birds cent and reduced affected land in the state to subsidies for enhanced risk management and resistance to local pests and disease – are less than 100 acres . Second, a recently engaged tools, along with limited cuts to nutrition the same that make for a successful invasive campaign in Florida is stopping the release of programs, which comprise 80 percent of all species . Early detection and action is nec- Nile monitor lizards and constrictor snakes Farm Bill spending . essary for those species that do become in- into the Everglades, where the species already troduced and, on this front, states are much have decimated native animal populations . Attention then shifted to the House, where more able to respond effectively and rapidly . the House Agriculture Committee passed Because exotic species typically experience Invasive species are an issue of importance a bill that similarly eliminated direct pay- a “lag” phase between their initial introduc- to state policymakers because they have tre- ments in favor of a different approach to risk tion and when they become widely estab- mendous impact on local and state economies management from the Senate and made deep- lished, early and comprehensive action can and finances, as well as tremendous ecolog- er cuts to the nutrition title of the bill . How- mean the difference between control and ical impacts . To address the invasive spe- ever, House leadership did not have sufficient widespread damage . cies issues, states should consider developing votes to pass the legislation on the floor of a framework that includes key representa- the House and, therefore, did not bring it up The Center for Invasive Species and Eco- tives and give them authority, resources, and for a vote . system Health at the University of Georgia a mandate to cooperate across agencies . This maintains a database of current and poten- likely would include developing an invasive The major conflict for agriculture between tial invasive species – nearly 2,800 across all species plan and a dedicated trust fund for re- the two pieces of legislation was the bias in taxa including plants, animals, aquatics, and search, response and education . Moreover, it the Senate bill toward crops traditionally pathogens . The Center hosts this list on a is important to include biofuels and bioener- grown in the Midwest (corn and soybeans in website which is part of a suite of education gy in an invasive species plan to address the particular) and against some crops restricted and outreach tools it maintains . Additional- use of non-native species to support biofuels in large part to the South (peanuts and rice, as ly, the Center promotes a “don’t move fire- production . There are existing models for in- well as to a lesser degree, cotton) . The House wood” campaign, in part because of the risk vasive species councils, with some states hav- bill rectified some of this bias, but doing so the practice poses to forest ecosystems . ing code sections or cost-share programs to resulted in the need for deeper cuts to nutri- address these issues . tion programs . 6 Shortly before Congress was to recess in Au- joys support from the General Assembly for The wide use of Roundup – 120 million acres gust, the leadership in the House first at- targeted efforts to exploit opportunities in a year in the United States – and the prac- tempted to pass a one-year extension of the key markets . tice of discontinuing other herbicides of- Farm Bill, which would have eliminated fered cheap weed control that, over time, funding for a number of key programs for Impact of Herbicide Resistant Weeds forced resistance . Weed control needs to be conservation, rural communities and be- Herbicide resistance in weeds is an inherited a host of approaches to protect all modes of ginning farmers and ranchers . However, ability of a weed population to survive and action . In the decade after the introduction this was not successful in the House Rules reproduce after exposure to a herbicide appli- of glyphosate-tolerant seeds in soybeans and Committee, setting up a need for emergen- cation that would control an unselected pop- cotton, their adoption rate has risen to near- cy drought relief legislation or a rushed five- ulation . Herbicide resistance is an economic ly 90 percent, a trend that has been matched year Farm Bill after Congress returns from problem that could – and likely will – get by a precipitous drop in the number of dif- August recess . Unless reauthorized, the Farm worse if nothing is done . For the most part, ferent herbicides used on those crops . There Bill will revert to permanent law, most of agricultural producers, conservationists and currently are nine weed species with con- which dates back to the Great Depression and land managers are playing defense on herbi- firmed resistance to glyphosate in the Unit- does not include nutrition programs or much cide resistant weeds . ed States, with 13 additional species in other else with which current farmers are familiar . countries . Additionally, 50 weed species are Herbicides work by affecting plant biology in resistant to more than one herbicide mode of Agricultural Trade Promotion: a handful of ways, what are known as mech- action, more than double the number a de- Virginia’s Aggressive Trade Agenda anisms of action (MoAs) . There are only 16 cade previously and a more than tenfold in- As in many states in the South, agriculture identified MoAs, with the last one developed crease from 20 years ago . and forestry are Virginia’s largest industries . in the 1980s . The absence of new MoAs for The combined sectors contribute more than herbicides makes the issue of resistance even The Weed Science Society of America has $79 billion to the commonwealth’s economy, more troubling because, as herbicides be- assumed a national leadership position on creating nearly 500,000 jobs through produc- come compromised, there are fewer “arrows this front, recommending steps for grow- tion, value-added and supporting industries . in the quiver” for effective weed control . ers to preserve the function of herbicides, Agriculture exports are a very important including full-label-rate applications (be- component of Virginia’s success, represent- Some herbicide MoAs essentially are entirely low-rate applications, while cheaper for the ing nearly 30 percent of annual farm cash re- compromised in some crops, with others on producer, serve as a forcing factor for resis- ceipts and supporting a host of high paying the rise . Possibly the most prominent recent tance), diversification of herbicides and ro- jobs in support sectors . case has been with glyphosate – Roundup – tation of traits and herbicides across seasons . which is now about 30 percent compromised, The Society has developed an extensive ed- Virginia has achieved a degree of success but has an outsized impact because of the ucation series for producers, extensionists with agriculture exports, setting a record breadth of its application and adoption . The and others . The path forward requires con- $2 .35 billion in overseas sales in 2011, up 2 loss of function for Roundup and other her- tinued and expanded education and training percent over 2009, and 10 percent over 2010 . bicides has led to weeds with dual resistance, with a consistent message, along with a new Virginia’s success begins with the diversi- something that, for cotton, has increased emphasis on (and resources for) research, as ty of products the commonwealth produces production costs by a factor of five more due well as the development of new weed con- and its strategic mid-Atlantic location with to the need to perform manual weed control . trol options . Success depends on cooperation world-class transportation infrastructure . among all parties . The public sector plays a vital role in recog- nizing the importance of exports . Virgin- ia’s economic development and jobs creation plans fully integrate agriculture and forestry and feature high levels of collaboration and cooperation among all the players involved in marketing and delivering Virginia prod- ucts overseas .

The commonwealth takes a three-pronged approach to agricultural trade, depending on the market . For mature markets, the focus often is on finding niche opportunities and providing market access . In growing mar- kets such as China and India, Virginia ag- gressively promotes state products to expand access and markets . The state also maintains a focus on unconventional markets that oth- ers overlook, including Cuba and North Af- rica . To achieve these ends, agriculture is a part of every state trade delegation and en- 7 economic development, transportation & Cultural affairs Committee meeting summary

Sunday July 29 Evolving Role of State Infrastructure Banks: Lessons from the States David Tyeryar, Deputy Secretary of Transportation and CFO, Office of the Secretary of Transportation, Virginia Federal Surface Transportation Authorization Legislation: West Virginia’s Perspective Paul A. Mattox, Jr., P.E., Cabinet Secretary, Department of Transportation, West Virginia Senator Bill Sample Arkansas, Chair Elect 2011-2012 Monday, July 30 Competing in the National and Global Marketplace in Fiscally Challenging Times: West Virginia’s Approach Evolving Role of State Keith Burdette, Cabinet Secretary, Department of Commerce, West Virginia Infrastructure Banks: Infrastructure’s Impact on Economic Growth Lessons from the States Alex Herrgott, Director, Congressional and Public Affairs, u .s . Chamber of Commerce, At a time of increasing fiscal pressure, states Washington, D C. . are devising a range of financing mecha- nisms to fund essential infrastructure proj- There are strict guidelines regarding eligible Federal Surface Transportation ects . An innovative strategy that has risen applicants, projects, and types of assistance; Authorization Legislation: to the forefront involves state infrastructure the application process, including mini- West Virginia’s Perspective banks (SIBs), a revolving investment fund for mum eligibility requirements and the appli- the purpose of offering financial assistance cation screening criteria; the disbursement One of the most critical ways the federal gov- to road and highway construction projects . process; recipient reporting requirements; ernment influences the economic capacity The commonwealth of Virginia has deployed and repayment requirements . A number of and potential of states is through federal sur- funds from SIBs to initiate a number of vi- projects that received VTIB funding in Vir- face transportation legislation . Hence, when tal transportation projects . Established by ginia currently are in progress, including the President Obama signed a 27-month sur- statute in 2011, the Virginia Transportation Route 17/Dominion Boulevard Project (city face transportation reauthorization bill on Infrastructure Bank (VTIB) is a special, non- of Chesapeake); Gloucester Parkway-Pacif- July 6, 2012, dubbed the Moving Ahead for reverting, revolving loan fund created to ic Boulevard Project (Loudoun County); and Progress in the 21st Century (MAP-21) Act, provide grants, loans and other financial as- the 85 Connector/Route 460 Corridor Im- which had been approved the prior week by sistance to advance transportation projects . provement Project (southeastern Virginia) . Congress, state transportation officials, in- cluding West Virginia officials, voiced their approval and support . Not only will MAP- 21 run through September 30, 2014, and in- volve $105 billion in total funds, it replaces the nine-time extended SAFETEA-LU legis- lation, the federal surface transportation leg- islation that expired in September 2009 . The level of certainty that arises from permanent surface transportation legislation remains a huge boost to state transportation planners as they embark on essential transportation projects across the country .

Under MAP-21, for fiscal years 2012 and 2013, West Virginia’s annual federal apportion- ment is $423 .3 million . In fiscal year 2014, there is a slight increase in apportionment, allocating approximately $427 million in fed- eral highway funds to the Mountain State .

8 The specifics of the new MAP-21 legisla- tion are far reaching for states and contain the potential to boost economic output sig- nificantly . Specific measures in the legisla- tion included:

»» creating a streamlined, performance- based, and multimodal program to ad- dress the many challenges facing the u .s . transportation system; »» consolidating highway and transit pro- grams; »» expanding the availability of innovative finance mechanisms and leveraging fi- nancing mechanisms by enhancing the Transportation Infrastructure Finance and Innovation Act (TIFIA) program with a 10-to-one leverage that could fi- nance projects totaling as much as $18 billion; »» increasing the amount of a project’s cost rate was fueled mostly by coal exports while Infrastructure’s Impact on that can be funded with loans and guar- non-coal exports (plastics, machinery, opti- Economic Growth antees a maximum of 49 percent—up cal/medical products) also turned in record There is very little debate that the United from the current 33 percent; performances . Beyond promoting exports, States needs a transportation system that »» requiring projects to satisfy certain cred- West Virginia’s focus in the economic devel- moves its people and delivers goods in both itworthiness standards in order to be eli- opment arena revolves around expanding a timely and safe manner . However, there is gible for assistance; the well-being of the citizens of the state by less agreement on the financial investments »» expanding and enhancing the ability of providing a cooperative interagency system that are critically needed across the coun- states to use tolling as a revenue gener- that stimulates diverse economic growth and try to achieve this essential transportation ator to construct new capacity, recon- increased employment opportunities for all goal . In an effort to efficiently and effective- struct, restore or rehabilitate highways West Virginians; encourages the appropriate ly connect workers with employers, employ- on the Interstate System; use of the state’s abundant natural resources; ers with suppliers, and businesses with their »» establishing national goals in seven ar- improves the safety and productivity of the customers, the u .s . Chamber of Commerce is eas – safety, infrastructure condition, state’s work force; and promotes the beauty leading a nationwide effort to spur business- congestion reduction, system reliability, and desirability of West Virginia as a world- es, labor, transportation stakeholders and freight movement and economic vitali- class tourism destination . concerned citizens to advocate for improved ty, environmental sustainability, and re- and increased federal investment in the na- duced project delivery delays; There are a number of promising projects tion’s aging and overburdened transporta- »» modernizing the metropolitan and state- on the economic landscape in West Virgin- tion system . The failing u .s . transportation wide planning process by moving to a ia that offer optimism for the state’s econom- system carries tremendous financial burdens performance-based approach; and ic future . One of these projects involves the with congestion costing the American econ- »» providing further reforms to accelerate Shell ethane cracker plant in Monaca, Penn- omy an estimated $115 billion in 2009 alone; project delivery, including many reforms sylvania, about a dozen miles from the West resulting in roughly one-third of the nation’s that state departments of transportation Virginia border . This Shell plant is one of major roads remaining in poor or medio- have long advocated . several ethane cracker plants that will be cre condition; u .s . transit systems earning a built in the Appalachian region, and each in- grade of “D” on the American Society of Civ- Competing in the National and volving a minimum capital investment of of il Engineers’ annual Infrastructure Report Global Marketplace in Fiscally $3 .2 billion, with thousands of people hired Card; and the underperforming American Challenging Times to build the plant and hundreds more secur- transportation system costing the u .s . econ- Even during the bleakest economic peri- ing permanent jobs . It is projected that these omy nearly $2 trillion (2008 to 2009) . In or- ods and in the midst of tremendous revenue plants eventually will attract other manu- der to initiate vital infrastructure upgrades challenges, state policymakers have no op- facturing facilities that will benefit from the so that the United States can compete effec- tion but to continue pursuing economic de- close proximity to the chemicals the ethane tively in the 21st century global marketplace, velopment opportunities . West Virginia is cracker plants will produce . West Virginia minimize safety concerns, enhance the na- a state that adopted such a strategy and has will profit tremendously from the Shell plant tion’s quality of life and mitigate adverse en- secured notable successes, including achiev- and other ethane cracker facilities, not only vironmental impacts, the u .s . Chamber of ing the highest expansion rate in the nation as a means of providing employment to thou- Commerce urges elected officials at all lev- (39 .5 percent over the 2010 level) for state ex- sands, but also by enhancing the econom- els of government to take action to repair, ports in 2011 . West Virginia’s export growth ic environment of the region through added rebuild and revitalize the nation’s roads, economic activity . bridges and public transportation systems . 9 education Committee meeting summary

Sunday, July 29 Reforming K12: Update on Kentucky Senate Bill 1 Terry Holliday, Ph.D., Commissioner of Education, Kentucky Robert L. King, President, Kentucky Council on Postsecondary Education Alicia Sneed, J.D., Acting Executive Director, Education Professional Standards Board, Kentucky Representative Sara Thomas Monday, July 30 Mississippi, Chair 2011-2012 Higher Education Finance Reform Russ Deaton, Ph.D., Associate Executive Director for Fiscal Policy and Administration, Tennessee Higher Education Commission Reforming K-12: Update on Kentucky SB1 David Wright, Chief Policy Officer, Tennessee Higher Education Commission In 2009, the Kentucky General Assembly approved SB1, which mandated that the marked . The legislation also set some very more students would be identified as not col- commonwealth’s Council on Postsecondary ambitious goals, including reducing college lege ready, and public understanding of the Education, Board of Education and Depart- remediation (by 50 percent by 2014 from the reasons for this rise would help to protect the ment of Education develop a unified strate- 2010 rates) and increasing college comple- integrity of the system . gy to reduce remediation and increase college tion rates (by 3 percent annually over the completion rates . To fulfill this, Kentucky same period) . The process resulted in a standardization of has pursued multiple strategies at all lev- general education learning outcomes and fa- els, all predicated upon cooperation among Once the law was in place, however, the ques- cilitated transfer opportunities across the higher education, K-12 education and teach- tion then came to be not “what” but “who” system . The process also helped the state er preparation . needs to be aligned . There needed to be align- reach agreement on placement and com- ment among postsecondary, K-12, teacher mon learning outcomes expected for college In Kentucky, as in so many states, students preparation, as well as a mechanism for in- readiness and led to a redesign of teacher and show up at postsecondary institutions and put and review by the General Assembly and principal preparation incorporating more discover that they require remedial courses, governor . In too many states, the discussion rigorous standards and continuous assess- in part due to poor alignment between high- of alignment does not involve all the players, ment strategies . er education and K-12 . Because every student but relies heavily on input from K-12 . Ken- in the commonwealth is tested three times be- tucky’s approach pulls together standards The critical factor in realizing the benefits of ginning in 8th grade to determine if they are and assessments and accountability, which this kind of reform is buy-in, both from edu- on track to graduate, the state is able to de- are the heart of any K-12 reform effort, as well cators and the public, and having the staff on termine whether students are on course to as professional development and college and the ground prepared to teach the new stan- graduate ready for college or unprepared for career readiness . dards . Without thoroughly prepared and college level work . engaged teachers, the standards and assess- Kentucky was fortuitous in its timing, be- ments will not result, in and of themselves, in The high number of students graduating un- ginning the implementation in advance of any increase in college readiness . The man- prepared for college results in poor college the announcement of Common Core Stan- date in the Kentucky legislation for coopera- completion rates, with prepared students en- dards . This allowed the commonwealth to tion among all levels of education, including joying a two-to-one advantage in terms of have in place the resources it needed to influ- teacher preparation, provides an opening for completing a postsecondary program . Be- ence the discussion of final standards, which this, but the institutions must trust one an- cause completion rates are a measure for in turn gave faculty members and higher ed- other and perceive that the mission of educa- higher education performance, the postsec- ucation confidence and buy-in into the pro- tion reform is a joint one . ondary system clearly had a vested interest cess . This buy-in also was critical to bolster in improving the readiness of those students efforts to inform the public about the chang- The Education Professional Standards Board graduating high school . es that would be taking place in the coming took to its task in a serious manner, restruc- years, since teachers and faculty were able to turing requirements for admissions to teach- The legislation passed in 2009 called for discuss the process of reform and the chang- er training programs, clinical experiences, clearer, fewer, more in-depth standards . The es that would occur . It was important to and student teaching for all 30 of the state’s standards were to be aligned with postsec- have this public support because, as the sys- preparation programs . The Board also es- ondary standards and internationally bench- tem was implemented, it was anticipated that tablished procedures for teacher internships 10 to ensure mentor teachers and principals, as ing for existing goals, much less ambitious capture the purpose of the institution and well as teacher interns, gain experience with goals of expanded participation and comple- weights outcomes based on the mission of the the new standards . Moreover, the common- tion . Leading up to the creation of the leg- school—a school that is principally geared to- wealth has in place plans for on-going pro- islation was a series of conversations about ward research gets support based in part on fessional development to implement core what the desires were for higher education research, a bachelor’s degree institution gets academic standards and align syllabi and as- institutions, and how they fit into an over- weighted on their 4-year degrees . Weighting sessments . The process has enjoyed unprec- all public agenda . factors in the formula for each campus are de- edented levels of engagement from higher termined by outcomes—graduation rates, re- education to achieve the goals set for K-12, The CCTA began from a fundamental ques- search completed, transfers effected—and both within teacher preparation and beyond . tion: How does a state make a decision on reflect institutional mission differentiation This collaboration has both strengthened the how much money an institution receives? while providing base funding for each school . process and integrated it broadly across the With the CCTA, Tennessee retired its enroll- Each institution also must select from among entire education system in Kentucky . ment-based model and built a performance- 15 sub-populations to show they are making based funding model or, more properly, an progress with populations or in areas that Higher Education Finance Reform outcomes-based formula . This is not a re- have been traditionally underserved, plac- There is a compelling public interest in in- form of the state’s existing performance- ing student access at a principal place in the creasing educational attainment among a based funding which only covers 5 percent funding model . The formula recognizes two state’s citizens as higher levels of attainment of state funding . populations—low-income and adult-return- correlate to higher income levels, lower un- ing students—for special attention, weight- employment, and a host of other positive The legislation also provided for mission dif- ing them 1 4. times a student in the general social and economic indices . States have at- ferentiation among schools to reflect the dif- population, in order to establish an incen- tempted to encourage institutions of higher ferent purposes individual institutions may tive for institutions to serve these underrep- education to increase the number of grad- have; allowed articulation and transfer; and resented groups . uates with degrees and certificates, but of- moved remediation and developmental ed- ten find themselves with limited tools and ucation out of the public university system The outcomes model is used for all funding leverage . and into the community college system . The for higher education and all money is up for model is driven by a primary goal of meeting reallocation every year . The model works re- As in most states, Tennessee had, prior to the u .s . average in educational attainment gardless of whether state allocations are in- the passage of the Complete College Ten- by 2025 (a move that requires a cumula- creasing, decreasing or remaining flat . To nessee Act (CCTA) in 2010, used an enroll- tive 26,000 additional degrees by 2015, and avoid productivity changes from radically ment-based formula for determining higher 210,000 additional degrees by 2025, a 4 per- affecting state appropriations to a given in- education funding, with only a very small cent increase annually) . stitution, the model does not overreact to portion of funding determined by perfor- immediate changes even as it reflects pro- mance factors . Because incentive funds are Every dollar of funding for higher education ductivity gains or declines . Essentially, the “on top” of formula funds, the overall impact is based on outcomes . No institution is en- model allows for enough volatility to get in- on the behavior and practice of colleges and titled to a minimum level of appropriations stitutions’ attention without undermining universities is relatively limited . based on prior year funding . Every year, the their success . state reallocates funds based on the previous The fiscal realities in Tennessee against year’s outcome, with the model scoring mon- One of the long-term benefits is that this pro- which the CCTA was enacted include re- etized through the use of a report on average gram links higher education to state govern- duced state funds for institutional operations pay for professors . ment expectations . This allows the state to and increased enrollment and costs, leading shift the demands it makes on higher educa- to ballooning tuition . The standard model This model is not based on a universal, state- tion over time without entirely redesigning was simply not providing sustainable fund- imposed goal for all institutions, but tries to the higher education system . 11 Energy & Environment Committee meeting summary

Sunday, July 29 Energy Security and Economic Development: The Future of Infrastructure Tristan Sanregret, Director of Alberta-u .s . Relations, Canadian Embassy, Washington, D C. . Jim Dunlap, President, Jim Dunlap Consultants, Oklahoma Advancements in Renewable Fuels Technology Randy Wolf, Director of Business Development, Balcones Resources, Arkansas Representative Chuck Martin Monday, July 30 Georgia, Chair 2011-2012 Fossil Fuels and the Role of Emerging Technologies Richard A. Bajura, Ph.D., Director, National Research Center for Coal and Energy, West Energy Security and Economic Virginia Development: The Future of Presentation of the Southern States Energy Board’s 2012 Legislative Digest Infrastructure Representative Weldon Watson, Oklahoma Currently, the United States has more than 2 million miles of pipeline – the primary mode of transportation for crude oil, petro- would create 3 .6 million new jobs – enough $15 9. billion per year to the u .s . economy and leum and natural gas . Approximately 71 per- to lower the national unemployment rate by will support an average 93,000 to 175,000 u .s . cent of crude oil and petroleum products, and 1 percent by 2020 . jobs per year between 2010 and 2035 . The to- almost all natural gas fuels, are shipped by tal GDP gain for the United States could reach pipeline across the continent . Pipelines pos- The single largest source of oil in North upwards of $6 billion per year . In SLC states, sess a substantial cost advantage over other America is the Canadian oil sands, which oil sands development could yield more than means of transportation and, according to are a naturally occurring mixture of sand, $4 .5 million in GDP, with almost $1 .5 million the u .s . Department of Transportation (US- clay, water and bitumen – a very heavy oil – in Texas alone . DOT), are more reliable and safer than both and most of this fuel is transported by pipe- road and rail . According to the USDOT, rail line . Bitumen extracted from mining and The impact of the Keystone XL pipeline has the highest rate of incidents at 651 per in situ operations, mainly in northern Al- could bring direct capital investment of $845 billion ton-miles per year, followed by road, berta, is separated from the sand, upgraded million to Oklahoma alone, with total capi- with 20 incidents per billion ton-miles every to refinery-ready crude oil, and transported tal expenditures reaching $1 .2 billion for the year . Oil products transported by pipeline throughout the United States using the same project . The pipeline could result in 1,200 are the safest, with just 0 .61 serious incidents pipelines transporting other types of oil . direct jobs during construction, as well as every billion ton-miles . 14,400 person-years of employment, if in- Canada possesses the third largest reserves of direct jobs during construction are includ- Pipeline safety is crucial, especially as North oil in the world at 174 billion barrels, second ed . The project also has brought significant America continues to increase its production only to Saudi Arabia and Venezuela . Alber- capital investment to various portions of the of oil and gas . It is important to the economy, ta alone possesses 169 billion barrels . These state, like Cushing . In January 2012, the u .s . since jobs rely on production which in turn vast reserves make reliable transportation to Department of State (USDOS) recommended relies on a network for getting fuel from one refineries on the Gulf Coast and throughout a rejection of a presidential permit for Key- place to another . Since the recession, the oil the South more important than ever . Signif- stone XL, which President Obama accepted . and gas industry has been the only sector of icant growth in Canadian oil sands exports In May 2012, TransCanada submitted an- the economy that has seen steady job growth, to the United States will reduce dependency other presidential permit application to the adding 86,000 new jobs, while the economy on oil imports from more volatile countries . USDOS for the Keystone XL pipeline, sup- as a whole lost 5 million . Additionally, the In addition to energy reliability and security, plemented with an alternative route . The United States produced 15 4. billion barrels the economic benefits of increased refinery USDOS has announced that it will make a fi- of oil and gas in 2011, and the u .s . House of capacity would be substantial for Southern nal decision on this application by the first Representatives recently passed legislation states . With $194 billion in forecasted capi- quarter of 2013 . to expand drilling off the coasts of Califor- tal spending on oil sands development in the nia and Virginia, promising further pro- next 10 years, a significant amount will be Advancements in Renewable Fuels duction . Some estimates predict, given the spent on purchasing materials, equipment, Technology passage of certain policies, that oil and gas parts and services from suppliers in the Unit- According to the Bureau of Labor Statis- output in the United States could nearly dou- ed States . Oil sands development will, on av- tics, approximately 3 1. million people in the ble to 27 billion barrels a day by 2020, which erage, contribute between $8 4. billion and United States worked in “green jobs” in 2011, 12 including 2 .3 million in the private sector . Those numbers will continue to grow as in- novations in renewable fuel technologies continue to promote opportunities to devel- op cleaner and more sustainable energy pro- duction . A number of companies have been exploring the usefulness of nontraditional waste streams for producing high-bitumen- content fuels . The process is an integral part of the u .s . Environmental Protection Agen- cy’s desire to limit landfill disposal of waste .

There is a hierarchy of desirable waste-for- fuel conversion, based on energy output and ease of conversion, which is affected by mois- ture, ash, British thermal unit (BTU) value, contamination, location, disposal options and cost . The most challenging to convert is municipal solid waste (MSW) and haz- ardous waste . Next is agricultural waste, sludge and bio-solids . The second best waste environment . Understanding this, securing mately $0 .03 per kilowatt hour for the cost for fuel conversion is post-residential mu- abundant energy, protecting the environ- of electricity . It also is important to contin- nicipal recovery facility residue, and the ment and maintaining a vibrant economy ue work in areas like water quality and con- optimal waste for producing fuel is post-in- are not mutually exclusive goals . The United sumption . Reduction of freshwater usage is dustrial waste and tire-derived fuels . Bal- States holds the world’s largest estimated re- a major performance goal, including a near- cones Resources, for instance, handles all coverable reserves of coal and is a net export- zero cooling water-use plant option by 2020 . of the post-industrial waste from four pro- er of the resource . In 2011, the United States duction facilities that process goods like di- produced more than 1 billion short tons of A realistic goal for CO2 management is a 10 apers, baby-wipes and feminine care product coal, according to the u .s . Energy Informa- percent increase in the cost of electricity for to produce fuel cubes, which are identical to tion Administration, more than 90 percent of a more than 90 percent removal of CO2, in- a wood chip in size and configuration, but which was used by u .s . power plants to gen- cluding sequestration . Also, a near-zero with a BTU value 2 .5 times greater than that erate electricity . However, new and innova- emission power and multi-product plants ca- of wood . tive technologies are needed to achieve coal pable of CO2 capture and sequestration are plant environmental targets that are cost realistic roadmap goals . Furthermore, ad- Independent analysis by the University of competitive with alternative options with vanced combustion and advanced gasifier Texas indicates that waste-to-fuel is more comparable environmental performance . In systems are being developed, which can help energy dense than most forms of coal and applying new technology to existing power lower cost, increase efficiency and produce petroleum coke . If 100 percent of landfill mu- plants, the goal is to improve environmental higher availability . These developments nicipal solid waste was recovered for energy, performance while maintaining a competi- can reduce dependence on imported oil, help it could power 16 4. million homes every year, tive cost of electricity . maintain diversity of energy resource op- or 5 percent of the total u .s . consumption . tions, retain domestic manufacturing capa- There are opportunities to co-fire with coal There are a variety of areas where environ- bilities, as well as result in higher standards in power boilers and kilns, as well as the po- mental improvements can be made to power of living and increased social and econom- tential for gasification technology and pyrol- plants, including air emissions (sulfur diox- ic stability . ysis (i .e ,. plastics to oil) . States can promote ide, nitrogen oxides, particulate matter and such technology by broadening the defini- mercury); carbon dioxide (CO2) manage- Presentation of the Southern tions of “renewable” and “clean” to include all ment; byproduct utilization; water use and States Energy Board’s 2012 MSW and emerging conservation technolo- discharge; plant efficiency; reliability and Legislative Digest gies in order to support development and use availability; and capital and product cost The Legislative Digest is a compilation of all renewable options . Also, states can sim- (power and fuels production) . Integrating of energy and environmental legislation plify the permitting process (e .g ,. defining the best available plant technology capabil- enacted by Southern states, published by high energy MSW as a “fuel,” not a “waste”), ities can lead to substantial environmental the Southern States Energy Board (SSEB) which can encourage innovation . Finally, improvements . For instance, by 2020, pow- for more than four decades . The 2012 SSEB states can include energy recovery in future er plants can reach performance standards Legislative Digest is available online at state energy plans . of greater than 99 percent for sulfur diox- www.sseb.org/reference.php . ide; 95 percent for mercury recovery; nearly Fossil Fuels and the Role of 100 percent for byproduct utilization; 50 to Emerging Technologies 60 percent for plant efficiency; greater than Energy is an economic engine . Economies 90 percent for availability; $800 to $900 per that are sound are better able to protect the kilowatt in plant capital costs; and approxi- 13 fiscal affairs & government operations Committee meeting summary

Monday, July 30 Leveling the Playing Field: Online versus Main Street Purchases Delegate John Doyle, West Virginia Bolstering the Financial Position of State Unemployment Insurance Funds: Recent Trends from Virginia Clyde Cristman, Legislative Fiscal Analyst, Senate Finance Committee, Virginia

Representative James R. “Jim” Fannin Louisiana, Chair 2011-2012 line retailer, Amazon, also has come on board In response, a number of remedial measures to support a federal solution to the piecemeal have been introduced in Virginia, including effort currently in play in many states across an additional “fund builder” tax of $16 per Leveling the Playing Field: Online the country . For the first time since the leg- employee, which is triggered whenever the versus Main Street Purchases islation was reintroduced in Congress, there solvency of the UI fund falls below 50 per- As a result of two u .s . Supreme Court rul- is real optimism that there will be federal cent . In addition, a “pool tax,” i .e ,. one that is ings, states currently are not allowed to com- action authorizing states to collect the full dispersed among all employers, is imposed to pel out-of-state retailers to collect sales taxes amount of sales taxes – with certain excep- address the unfunded liability of the UI fund . on goods purchased through catalogues or tions – owed on e-Commerce transactions . Furthermore, legislation introduced in 2011 over the Internet . Not only does this place an required that all legislation enhancing un- undue business disadvantage on brick-and- Bolstering the Financial Position employment compensation benefits must mortar retailers, but a study by the Univer- of State Unemployment Insurance contain a statement reflecting the projected sity of Tennessee estimated that states will Funds: Recent Trends from Virginia impact on the solvency of the trust fund and be unable to collect as much as $23 billion In the aftermath of the Great Recession and the average increase in state unemployment in owed sales taxes in fiscal year 2012 . This the record number of unemployed Amer- tax liability of employers resulting from any number is expected to soar given that e-com- icans, state unemployment insurance (UI) increased benefits . merce sales have been burgeoning at an expo- funds have come under an incredible degree nential pace every year . of fiscal pressure . In an effort to bolster their Even though the state’s UI fund still is not often insolvent state trust funds, states have fully funded, the corrective actions intro- In an effort to circumvent the u .s . Supreme enacted a range of policies to amend their UI duced in Virginia, along with the improving Court rulings, states have pursued a series of programs . In the final quarter of 2011, states economy in the state, i .e ,. a declining num- options including becoming members of the also had to contend with their first feder- ber of individuals filing unemployment in- Streamlined Sales Tax and Use Agreement; al interest payments on historic levels of UI surance claims, has resulted in the state’s UI passing affiliate nexus or “Amazon Laws;” trust fund loans—borrowing that was neces- fund moving toward solvency . enacting notice laws that require the remote sary in order to cover benefit payments dur- vendor to provide information about the use ing the worst recession that state programs tax to buyers; and urging Congress to pass have ever faced . legislation that would give states remote col- lection authority . Of all these efforts, the one Virginia is one of nine SLC states that de- that will provide the most comprehensive so- vised specific measures to deal with the chal- lution involves action at the federal level, i .e ,. lenge of faltering UI funds . By July 2012, action by Congress, authorizing states to col- Virginia had borrowed $818 million while lect the full amount of the sales taxes owed projected additional outlays will take this to them . figure to over $1 billion by April 2013 . While the Great Recession’s impact on the solvency In recent months, there has been genuine bi- of Virginia’s UI trust fund remains indisput- partisan movement in Congress with The able, several prior actions (slashing the tax Marketplace Equity Act (HR 3179) in the rate on employers and enacting benefit in- House and The Marketplace Fairness Act creases) contributed to the challenges faced (S 1832) in the Senate . The world’s largest on- by the state’s UI fund .

14 human services & Public safety Committee meeting summary Monday, July 30 Justice Reinvestment: Strategies for Curbing Recidivism and Reducing Corrections Costs Speaker Kris Steele, Oklahoma David Guice, Director, Division of Community Corrections, North Carolina Megan Grasso, Policy Analyst, Justice Center, The Council of State Governments Special Report: Health Industry Perspective on the Patient Protection and Representative Sharon Coooper Affordable Care Act Georgia, Chair 2011-2012 Paul Skowronek, Vice President, State Affairs, America’s Health Insurance Plans Justice Reinvestment: Strategies probation and parole officers, behavior and state focused heavily on those probationers, for Curbing Recidivism and treatment providers, and victims and victim prisoners and parolees who required mental Reducing Corrections Costs advocates, all were involved in the planning health and/or substance abuse treatment to and implementation processes . determine proper programming . For nonvi- The Justice Reinvestment initiative is a proj- olent parole violators, for instance, alterna- ect of The Council of State Governments At the time Oklahoma began its justice rein- tives to returning to prison were introduced . Justice Center focusing on a data-driven ap- vestment program, the state led the nation in Before the implementation of justice rein- proach to reducing corrections spending and incarcerated females per capita and was third vestment initiatives, 51 percent of felons reinvesting the savings into strategies that in incarcerated males, which placed their were being released from Oklahoma prisons can decrease crime and improve public safe- prisons at 98 percent capacity . The state’s with no supervision . The reforms require ty . The initiative is bipartisan, inter-branch corrections budget had increased 30 percent nine months of supervision for all parolees . and inter-disciplinary in structure, and im- during the last decade . The Oklahoma jus- plements three phases . The first step is to tice reinvestment initiative established sev- The most recently launched West Virgin- analyze data pertaining to crime, court, cor- eral key public safety provisions, including a ia justice reinvestment initiative is targeting rections and supervision trends; solicit input grant program to combat violent crime; pre- prison overcrowding, largely related to non- from stakeholders; develop policy options; sentence risk and need screening; mandated violent crime and repeat offenders; strength- and estimate corresponding cost savings . supervision for all offenders following re- ening community supervision programs; The second step involves deploying target- lease from prison; and swift and certain sanc- and interventions for parolees who are most ed reinvestment strategies and reviewing the tions for probation and parole violators . The likely to reoffend . progress of implementation . The final step is tracking the impact of enacted policies and Health Industry Perspective on the states must speculate as to how much control, programs, as well as monitoring recidivism Patient Protection and Afford- if any, they will have in federal-facilitated rates and other trends . Justice reinvestment exchanges . programs have been successful in a number able Care Act of states throughout the nation and the re- The Supreme Court decision on the Patient Similarly, states face various considerations gion, including North Carolina, Oklahoma Protection and Affordable Care Act pro- concerning essential health benefits and the and Texas, and is in the initial phases of im- vided various legal clarities on many issues Medicaid expansion, not the least of which plementation in West Virginia . confronting states . First, states must submit is affordability . Some health groups be- plans on health insurance exchange opera- lieve that, even with cost sharing and feder- Through justice reinvestment, North Caro- tions by November 16, 2012 . Second, states al subsidies, premiums will continue to rise, lina laid out the objectives of strengthening must select an essential health benefit bench- driven by taxes on premiums, age rating, es- probation supervision, holding offenders ac- mark plan by the third quarter of 2012 . Final- sential benefits, general rising healthcare countable in meaningful ways, and reducing ly, states must decide in the next year whether costs, and the universal coverage require- the risk of reoffending . The two-year sav- or not to expand their Medicaid programs to ment . Some independent studies show in- ings for 2011 and 2012 are approximately $79 133 percent of the federal poverty level . creases in non-subsidized premiums due to million, with $8 million targeted toward re- the essential health benefits requirement of investment . The projected six-year savings There are several things for states to consider the Act . However, states can promote more is $293 million, with an almost 5,000-per- regarding exchange development . States affordable coverage by leveraging the per- son decline in the prison population (from must decide before the November 16 deadline sonal coverage requirement and implement- the projected 43,220 to 38,264) by 2017 . An whether or not to select a benchmark plan . ing policies that structure open enrollment, important part of the justice reinvestment A second consideration is whether or not inside and outside the exchange; install wait- initiative in North Carolina has been en- premium subsidies will be available for states ing periods and late enrollment surcharges; suring that field personnel, such as sheriffs, that do not establish exchanges . Finally, and focus on existing state high-risk pools . 15 Legislative Fiscal Plenary jointly sponsored by the Fiscal Affairs & Government Operations Committee and Human Services & Public Safety Committee

Sunday, July 29 Enhancing the Funding Position of State Medicaid Programs: Lessons from Virginia Bill Hazel, M.D., Secretary of Health and Human Resources, Virginia To Expand or Not To Expand: State Medicaid Programs and the Patient Protection and Affordable Care Act Chris Whatley, Director, The Council of State Governments, Washington, D C. . Office

Enhancing The Funding Position of ment measures, which could top $100 mil- secure federal and private grants aimed at State Medicaid Programs: Lessons lion in savings per year by 2014 . For instance, improving quality of healthcare and low- From Virginia DMAS conducts extensive pre-payment re- ering costs . The Center researches and dis- In recent years, the scope of Medicaid has views and post-payment audits . These re- seminates information about innovative, exploded, attributable to expansion of eligi- views have resulted in a Centers for Medicare value-driven models of wellness and health- bility guidelines, growth of the eligible pop- and Medicaid Services Payment Error Rate care to stakeholders in state government, ulation, increased utilization, and expansion Measurement calculation of 0 7. percent, one business and the medical community . In ad- of services . With this expansion comes an of the lowest in the nation . Also, post-pay- dition to research and education through increase in cost . Nationally, over $366 billion ment identification of improper payment demonstration projects, VCHI is working in federal and state money is spent providing captures about 99 percent of what is missed to establish the Virginia Health Innovation services to approximately 59 .5 million recip- on pre-payment review, resulting in more Network, a subscriber-based portal that will ients . Virginia alone has more than 800,000 than $40 million in recovered overpayments provide innovative ideas, evaluations and recipients (over 900,000 including the Chil- during the last two fiscal years . In addition, recommendations to purchasers, insurers, dren’s Health Insurance Program), at a cost DMAS has achieved a 97 percent success rate healthcare providers, health plans, suppli- of $6 7. billion a year, with enrollment ex- for audit finding on appeal . Virginia also has ers, consumer groups, public health officials, pected to increase between 30 percent and 50 established a Medicaid Fraud Control Unit foundations, and other health data and re- percent under the Patient Protection and Af- (MFCU), which evaluated 58 cases referred search organizations . fordable Care Act . The Virginia Department from DMAS and yielded $25 million in re- of Medical Assistance Services (DMAS) pro- coveries in 2009 and 2010 . The MFCU con- Although they have experienced success cesses upwards of 33 million claims for med- tinues to expand its resources, which should through these reforms, Virginia is working ical services in any given year . further enhance fraud detection efforts . to improve their integrity efforts . In par- ticular, DMAS is focusing on improving the Virginia has made concerted reform efforts Regarding cost containment, in March 2012, effectiveness and collaboration of program to improve Medicaid program integrity the state launched the Virginia Center for integrity efforts under their Medicaid man- through fraud reduction and cost contain- Health Innovation (VCHI), which works to aged care program and attempting to beef up efforts to enhance data mining and further identify potential target areas for auditing . To Expand or Not To Expand: State Medicaid Programs and The Affordable Care Act On June 28, the Supreme Court of the Unit- ed States ruled on four key elements of the Patient Protection and Affordable Care Act (PPACA) . Following more than six hours of oral arguments in March, the Supreme Court concluded (9-0) that the Anti-Injunction Act, which prevents a suit challenging a tax from being heard before the tax is collected, does not keep the Court from considering the case, since the payments required to be made by individuals who do not purchase insur- ance are a “penalty,” not a tax . The Court also ruled (5-4) that the individual mandate is not constitutional under the Commerce Clause, 16 since the federal government cannot com- pel anyone to enter into commerce . On the question of whether or not a penalty levied against someone who does not get insurance is constitutional under the Taxing Power, the Court found (5-4), in the affirmative, that al- though such a “penalty” was not a tax for anti-injunction purposes, it operates like a tax (e .g ,. the Internal Revenue Service collects it), and therefore is constitutional . The rul- ings on these first three elements of the law essentially affirmed the individual mandate and most other aspects of the PPACA .

The final element on which the Court ruled involved the requirement in the PPACA that states expand Medicaid eligibility to 133 per- cent of the federal poverty level or lose all federal Medicaid funding . The Court held (5-4) that this requirement was unconstitu- tional, classifying it as “coercive ”. In short, states may choose to expand or keep current eligibility requirements . This decision ul- timately will be left up to state legislatures, with substantial risks associated with the de- cision, perhaps the most important of these is cost . Although the federal government will cover 100 percent of the expansion for the first three years, that share incremental- ly drops to 90 percent in 2020, leaving states to pick up 10 percent of expansion costs go- ing forward . In addition, with the individu- al mandate, Medicaid rolls will increase and states are concerned that, even though they will have to cover 10 percent of the expan- sion beginning in 2020, that is 10 percent of a very large number . Although initial Con- gressional Budget Office estimates put the cost of expansion for states at $20 billion over 10 years, other estimates are closer to $30 bil- lion . On the other hand, the risk of rejecting the option to expand forces states to cover the non-expansion costs associated with other population is opposed to healthcare reform . requirements of the PPACA . In the months Second, if a state does not begin implemen- to come, states will see rulemaking by the tation, then the federal government will Department of Health and Human Services operate the exchange, meaning that the op- and most likely will see grants and waivers eration of the exchange will benefit the fed- established as a mechanism for incentivizing eral bottom line . The most likely result is an states to choose expansion . exchange that pools individuals with small businesses, which will reduce federal spend- The second major decision that will face state ing on subsidies but make insurance more lawmakers is whether or not to participate costly for small businesses, analyses have in the health insurance exchanges, a mar- shown . The third option for states is to wait ketplace where individuals and small busi- to decide . The downside is that states would nesses may purchase insurance . So far, most be required to pay for implementation and states have forgone implementation, but the operation . Court’s decision changes the stakes of the de- bate . First, there are political repercussions for moving forward with an exchange, par- ticularly in states where the majority of the 17 Gulf Coast & Atlantic States Regional Task Force meeting summary

Sunday, July 29 Modern Advancements in Homeland Security and Emergency Management Stephanie L. Tennyson, Deputy Assistant Secretary, Intergovernmental Affairs, Department of Homeland Security, Washington, D C. .

Based on feedback from grantees, the Feder- This year, DHS Secretary Janet Napolita- al Emergency Management Agency (FEMA) no and FEMA Administrator Craig Fugate, Senator Dan Soucek implemented steps to increase flexibility and with the support of the Corporation for Na- North Carolina, Presiding Officer hasten the disbursement of more than $8 bil- tional and Community Service, announced Modern Advancements in Homeland lion in previous awards to address evolving the creation of FEMA Corps . The Corps is hazards . The majority of FY 2012 funding a 1,600-person unit created solely to address Security and Emergency Management supported existing preparedness efforts and emergency management by supporting di- In the wake of recent crises and disasters, sev- capabilities . Funding of new initiatives is de- saster recovery centers with logistics, com- eral innovative programs and tools have been pendent on the proposed project’s ability to munity relations and outreach personnel . developed to help enhance traditional home- be deployed regionally and nationally . The Corps consists of recent high school and land security and emergency management college graduates highly trained in all aspects policies and structures . From grant funding The risk formula devised to determine grants of disaster response . Ultimately, the Corps to new Department of Homeland Security for FY 2012 considered threats from domes- thrives because of the dedication displayed (DHS) programs to technological improve- tic and international terrorist groups . DHS by these young adults . In return, Corps mem- ments, efforts are being made to improve di- places special emphasis on law enforcement bers receive useful training regardless of saster prevention, preparedness, response terrorist prevention, preparedness and re- their career path . and recovery . sponse at the state, local and tribal level . An example of a DHS-supported initiative is the Recently, FEMA implemented a new ap- In the last decade, DHS awarded state, local, “If You See Something, Say Something” cam- proach to community relations called AIR, tribal and territorial entities over $35 billion paign, which was created and trademarked “Assess, Inform and Report ”. The mission of in funding . For FY 2013, DHS will focus on by the New York’s Metropolitan Transporta- AIR is to recruit community support, includ- funding to identify gaps and prioritize ca- tion Authority to support anti-terrorism ac- ing faith-based and volunteer groups/agen- pabilities through mutual aid agreements tivities and combat terrorism-related crime . cies, to communicate pertinent information like the Emergency Management Assistance It has since been licensed to DHS to raise pub- regarding available emergency services . Compact (EMAC) . The Compact, initially lic awareness of indicators of terrorism and developed as a Southern regional compact terrorism-related crime and to emphasize The Department of Homeland Security also following Hurricane Andrew in 1992, pro- the importance of reporting suspicious ac- increased technological efforts to commu- vides a system whereby states can access di- tivity to the proper local law enforcement nicate more effectively with a wider group saster assistance across state lines . authorities . of stakeholders . Along with a new mobile website – m.fema.gov – there have been three new initiatives developed: a new application for smartphones, a text messaging program and the FEMA Think Tank . The smartphone application provides users with prepared- ness information for various disasters, in- teractive checklists for emergency kits and maps of disaster recovery center locations . The text messaging service sends subscrib- ers safety tips throughout the year . Open to the public, the FEMA Think Tank comprises monthly conference calls and online forums whereby users can brainstorm new ideas for disaster prevention, preparedness, response and recovery efforts . Currently, there are over 450 topical forum discussions .

18 legislative service agency directors group meeting summary

Saturday, July 28 Pension Reforms in Southern States Anne Lambright, Counsel, Senate Pensions Committee, West Virginia Legislature Sujit CanagaRetna, Senior Fiscal Analyst, Southern Legislative Conference The Impacts of the Supreme Court Decision on the Patient Protection and Affordable Care Act Chris Whatley, Director, The Council of State Governments, Washington, D C. . Office The impacts of the U.S. Suprement Court Decision was presented by Mr. Whatley to a greater extent Jerry Bassett, Director during the Legislative Fiscal Plenary Session (see page 16) Legislative Reference Service Alabama Exemplary Legislative Member Services Chair Mary Quaid, Executive Director of House Legislative Services, Louisiana Don Hottel, Director of Research, House of Representatives, South Carolina ment of cash balance plans, which contain David Ferguson, Director, Bureau of Legislative Research, Arkansas (retired) features of both a traditional defined benefit system and a 401(k)-style system . Such plans have advantages to both employees and state Pension Reforms in Southern States among states . Finally, states must contend governments and have surfaced in Nebras- A March 2012 Wilshire Consulting Report with surging expenditures in other major ka, Louisiana, Kansas, Maryland, Montana on state retirement systems indicated that categories, including healthcare, education, and Pennsylvania . However, critics contend the ratio of pension assets-to-liabilities, or emergency management, corrections, un- that there are disadvantages particular to em- “funding ratio,” for the 126 plans reviewed employment insurance, transportation and ployees, such as the possibility of exhausting was 77 percent in 2011, falling from 100 per- infrastructure . the funds in their accounts at an earlier than cent in 2001 . A 6 percent decrease came in normal rate . fiscal year 2009 alone . A separate assessment States have attempted to bolster their pen- by the Pew Center on the States in June 2012 sion systems in a variety of ways, including Exemplary Legislative Member noted that the gap between states’ assets and issuing pension obligation bonds; increasing Services their obligations for public sector retirement employee contributions; revising automatic Although the individual legislative service benefits in fiscal year 2010 was $1 .38 trillion . cost-of-living adjustment increases; increas- agencies throughout the 15 SLC member SLC states are in varying levels of security ing the age and vesting levels; and lengthen- states serve different functions and are orga- in terms of retirement systems, with North ing the period that determines final average nized to meet the varying needs of state law- Carolina and Tennessee having the most suc- salary for pension benefits . Also, states have makers, a commonality among the agencies cess at 96 percent and 90 percent funding ra- experimented with prohibiting any retire- is the goal of providing legislators with the tios, respectively . ment benefit enhancements until the actu- most current, comprehensive and effective arial value of the system’s assets reaches 100 information available . As agencies continue In July 2012, the independent State Budget percent of actuarial funding liability, and to adjust their services due to the growing Crisis Task Force reported that state and lo- switching the most active members to hybrid demand of the legislatures, changing tech- cal government pensions are underfunded plans with a lower defined benefit combined nology and limited resources, providing non- by approximately $1 trillion, or 74 percent . with a mandatory participation in a defined partisan and impartial intelligence remains This is of grave concern for states, especially contribution plan . A number of states also of paramount importance . In addition to re- as they face other funding difficulties . Also, have established defined contribution plans search and bill drafting, many state agencies states across the nation must address a de- as an option for new members . provide services relating to committee staff- clining worker-to-beneficiary ratio, as well ing, speech writing for leadership and rank- as rising funding gaps at corporate pension Some states have looked at providing gov- and-file members; review of state agency plans and record deficits at the Pension Ben- ernment-run retirement plans for private rules; codification of laws; computer servic- efit Guaranty Corporation, the federal enti- sector employees, since pension plans in an es; and providing advice on issues related to ty that insures the benefits of private pension increasing number of private companies are constitutional, statutory and practical issues plans . In addition, reports of low personal facing serious financial difficulties and an concerning legislation . Sharing ideas about savings rates and minimal amounts set aside increasing number of Americans have failed how to manage staff and accomplish these for retirement for many Americans, and the to save adequately for retirement . Policy- goals is an integral goal of the SLC Legisla- “graying” of America—an increasing num- makers in over a dozen states have discussed tive Service Agency Directors Group . ber of Americans now reaching retirement and proposed such legislation . Another op- age and living longer—have created concern tion states have examined is the develop- 19 cOMMITTEE tECHNICAL tOURS

This year’s technical tours for the SLC Annual Meeting offered legisla- tors an opportunity to grasp a specific understanding of programs unique to West Virginia . The three tours took in five destinations that demon- strate a handful of the many successes of private sector operations in the Mountain State . Daniel Vineyards Daniel Vineyards is West Virginia’s unique boutique winery . At over 2,500 feet above sea level, the vineyard is home to “cold climate cultivars,” uncommon grape varieties for wine making . Since the first vines were planted in 1990, Dr . Daniel has experimented with 114 different variet- ies . At present, 14 varieties are producing grapes . The winery sits on the site of a former golf course just outside Beckley, West Virginia . The estab- lishment produces wines exclusively from grapes grown on the 20 acres of vineyards . The wines consistently win awards and medals at state, na- Agriculture & Rural Development Committee Technical Tour to tional, and international wine competitions . Daniel Vineyards Of more than 21,400 farms in West Virginia in 2008, the Daniel Vine- yards was judged one of the best conservation farms in the state . A deer training fence, Canadian Hemlock, and Lombardy Poplar surround each of the five vineyards . More than 225 rose bushes are planted at both ends of each grape row . Toyota Manufacturing facility in buffalo, west virginia The automobile manufacturing sector continues to be a major economic force across the South . The operations at the dozen or so automobile man- ufacturers and the thousands of auto parts suppliers in the region generate billions of dollars in direct and indirect economic activity while provid- ing employment to tens of thousands of citizens .

Toyota remains one of the most critical automobile manufacturing oper- ators in the United States, operating 10 plants across the nation, includ- ing manufacturing facilities in several SLC states (Kentucky, Mississippi and Texas) . In Buffalo, West Virginia, Toyota established a facility that manufactures four and six cylinder engines for assembly operations in Indiana and Canada, along with producing automatic transmissions and Economic Development, Transportation & Cultural Affairs Committee Technical Tour to the Toyota Manufacturing Facility gears for plants in Kentucky, Indiana and Canada . Established in 1996, the facility’s economic impact includes a current Investment of about $1 bil- lion and an employment roster of nearly 1,000 workers . Since the facil- ity’s initial announcement, Toyota has carried out six expansions in the more than 15 years the facility has been in operation . Operational and Reclaimed Coal mines Approximately 42 percent of electricity produced in the United States comes from coal-fired generation . The West Virginia Coal Association hosted a tour that featured a visit to the Tyler Morgan and Fourmile mining operations, two sites of Pritchard Mining . Tyler Morgan is a re- claimed site where, through a partnership with the u .s . Department of Defense and the West Virginia National Guard, post-mined land is used for military and domestic emergency response exercises . The terrain at the site is similar to that found in certain parts of Afghanistan and Pak- istan, and is ideal for various land training exercises . The Fourmile op- eration employs 75 personnel and produces approximately 600,000 tons Energy & Environment Technical Tour to the Tyler Morgan and Fourmile of coal a year . The site demonstrates first-hand the integral processes in- mining operations volved in coal extraction in Appalachia . 20 cOnference Notes

CSG Vice Chair Elected CARTER/HELLARD LEGISLATIVE STAFF center for the advancement of award leadership skills (CALS) alumni reception

Senator Mark Norris The SLC Executive Committee elected Sen- David Ferguson ate Majority Leader Mark Norris, Tennes- David Ferguson recently retired as the Di- see, 2010-2011 SLC chair, to serve as vice chair rector of the Arkansas Bureau of Legislative of The Council of State Governments . Sena- Research, which is a non-partisan service Representative Keith Ingram, Arkansas, SLC Vice Chair, and Representative Tom Dickson, Georgia tor Norris will become chair of CSG in 2014 . agency for the Arkansas House of Repre- sentatives and Arkansas Senate . He began The Southern Office of The Council of State his 32-year career with the Bureau in 1980 Governments and Southern Legislative Con- Thomas B. Murphy Longevity of as an attorney bill drafter . He served as di- ference have a long history of providing lead- Service Award rector for six years, supervising the exten- ership training opportunities to state elected sive operations of the Bureau—both during officials . With the implementation of term legislative sessions and the interim—which limits in five SLC-member states, and in include research, bill drafting, committee recognition of the changing political land- staffing, review of state agency rules, cod- scape in the South, the Executive Commit- ification of laws, computer services, and tee of SLC approved the establishment of providing advice on issues related to consti- the Center for the Advancement of Leader- tutional, statutory and practical issues relat- ship Skills to help emerging leaders from the Senator Tommy Gollott ing to legislation . Through the Bureau, Mr . South develop their communication, con- Ferguson served on various commissions and flict resolution, consensus building and crit- A member of the SLC Energy & Environment councils . Mr . Ferguson is a cattleman, mem- ical decision-making skills . Committee, Mississippi Senator Tommy A . ber of the Arkansas Cattlemen’s Association, Gollott has served the people of Mississippi and is the 5th generation to operate a family CALS embodies the SLC’s mission of cham- since 1968 . With 12 years of experience as a farm located in north central Arkansas . He pioning excellence in state government and state representative and 32 years as a state sen- is a lay minister and assists a number of con- providing non-partisan forums for state of- ator, he brings to the Legislature unparalled gregations . Recently, he has been using his ficials who might rarely cross paths to share knowledge of the political history and legisla- drafting and management experience by as- ideas . CALS offers full scholarships for can- tive processes of his home, the Magnolia State . sisting several non-profit groups with orga- didates from the legislative, executive and ju- nizational issues . dicial branches of state government .

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Continuing Legal Education CSG Innovations Awards Program Policy positions adopted at the 65th For the second consecutive year, the South- Nine panelists, comprising Southern state SLC annual meeting ern Legislative Conference Annual Meet- legislators, international affiliates, and The The Southern Legislative Conference adopt- ing gave attendees an opportunity to earn Council of State Governments (CSG) staff, ed seven policy positions at the 66th Annu- Continuing Legal Education (CLE) cred- selected two Southern finalists for the 2012 al Meeting: it for attending informative sessions offered Innovations Awards Program . The first, »» Regarding the Impact of Medicaid Fraud throughout the meeting and, specifically, at from Georgia, Probation Reporting Contact on Southern States a two-hour CLE workshop . For more infor- Center (PRCC), provides an efficient, al- »» Regarding Sales Tax Collections and E- mation regarding the annual meeting CLE ternative method of contact for low-risk Commerce Transactions in Southern accreditation, contact Reed Thodeson at probationers to report compliance with States [email protected] or the SLC office by calling court-ordered conditions of probation and »» Regarding the Emergency Management (404) 633-1866 . allows probation officers to concentrate Performance Grant Program for South- greater scrutiny on high-risk probationers . ern States Comparative Data Reports The second, the Oklahoma Collaborative Men- »» Regarding the Panama Canal Expansion Comparative Data Reports (CDRs) are pre- tal Health Reentry Program, addresses the re- and its Impact on Southern Legislative pared annually by select SLC states’ fiscal re- integration needs of an increasing number Conference States search departments . Because CDRs track a of offenders with mental illnesses by imple- »» Regarding the Reauthorization of the multitude of revenue sources and appropri- menting a planned release period complete Farm Bill ations levels in Southern states, they pro- with co-occurring substance abuse treat- »» Urging Congressional Action on the Rec- vide a useful tool to legislators and legislative ments, interagency collaboration and after- ommendations of the Blue Ribbon Com- staff alike as they determine their own state care peer support services . CSG began the mission regarding Used Nuclear Fuel spending . The reports presented at the SLC Innovations Transfer Program in 1975 to Disposal Annual Meeting were : highlight and share information about in- »» Combatting Prescription Drug Traffick- » Education » transportation ventive and effective state programs across ing and Abuse » Medicaid » Adult Correctional the United States . CSG’s headquarters and » Revenue Systems SLC staff review the applications each year To view the full text of these policy posi- Comparative Data Reports are prepared un- and determine eight finalists to make pre- tions and those of previous years, please visit der the auspices of the Conference’s Fiscal Af- sentations at the SLC Annual Meeting . The www.slcatlanta.org/policy_positions/. In accor- fairs & Government Operations Committee . winners of the award will be recognized na- dance with SLC Rule VIII, these Policy Reports for 2012 and dating back to 2000 are tionally at the CSG National Conference Positions of the Southern Legislative Con- available through the SLC website at: in Austin, Texas, November 30 - Decem- ference shall be sunset one calendar year fol- www.slcatlanta.org/Publications/. ber 3, 2012 . lowing adoption by the Conference .

22 A THANK YOU TO OUR SPONSORS The Southern Legislative Conference extends special thanks to the following friends in the private sector for their generous assistance with the general and substantive committee programs for our 66th Annual Meeting . We are grateful for their continued support and interest in the Conference over the years . American Chemistry Council | American Coalition for Clean Coal Electricity | BayerHealthcare | Cargill SLC Program ConocoPhillips |Domtar | Government of Canada | Hospital Corporation of America | Intuit Johnson & Johnson | LexisNexis | Medco | Merck | Monsanto | Phillips 66 | ReynoldsAmerican sponsors University of Phoenix | Wells Fargo West Virginia host state sponsors Rhododendron Cardinal West Virignia Division of Tourism American Electric Power | AMFM, LLC

Monongahela Potomac Kanawha Additional Sponsors AARP American Cancer Society-Cancer AFT - West Virginia AFT-West Virginia Alpha Natural Resources Action Network AT&T Coca-Cola Altria Client Services CAMC Health Systems Cracker Barrel Dominion Resource Services BrickStreet Insurance County Commissioners Association Frontier Communications International Resource Partners Central West Virginia Visitors Bureau Eli Lilly Independent Insurance Agents of Larry Puccio LLC Contractors Association of WV H . Van Amerigen Foundation West Virginia West Virginia Business and Industry Council EQT Corporation LifePoint Hospitals Nationwide Insurance West Virginia Chamber Genesis Partners Purdue Pharma United Mine Workers of America of Commerce GlaxoSmithKline ReynoldsAmerican West Virginia Oil & Natural Gas West Virginia Coal Association Norfolk Southern Corporation Wal-Mart Association, Inc . West Virginia Hospitality & Travel Association Penn National West Virginia Association of Counties West Virginia Oil & Natural Gas Association Security Financial Corp . WVEA West Virginia OMEGA Wheeling Island West Virginia Public Accountants Association The Greenbrier West Virginia Trucking Association WV Racing Special Thanks to Governor Earl Ray Tomblin Wells Home Furnishing | Yeager Airport | Charleston Visitors Bureau | Toyota West Virginia Beverage Association | West Virginia Division of Culture and History Host State Committee Host Committee Co-chairs Host Committee House Speaker Rick Thompson Senator Richard Browning Delegate Tom Campbell Delegate Richard Iaquinta Senate President Jeffrey Kessler Senator Robert Plymale Delegate Mike Ferro Delegate Eric Nelson Senator Roman Prezioso Delegate Jim Morgan Delegate Charlene Marshall Senator John Unger II Delegate Bonnie Brown Delegate Carol Miller staff coordinator Jason Williams, Assistant to Speaker Rick Thompson Host state staff Edith Adams Linda Cunningham Jenelle Jones Brandy McNabb Londa Sabatino Joe Altizer Barbara Daniel Jeremy Jones Mark McOwen Alice Shafer Teri Anderson Sallie Daugherty Sara Jones Jennifer McPherson Joey Sheen Brian Armentrout Mavery Davis Ralph Kent Jaelyn Merical Leslie Smith Cheryl Austin Mary Jane Dexter Candace Kraus Michael Midkiff Stacy Sneed Marjorie Azevedo Marguerite Duda Jean Ann Krebs David Mohr Dee Spelock Kevin Baker Margaret Eder Will Laird Jill Mooney Noelle Starek Dora Belcher Belinda Eggleston Anne Landgrebe Julia Morton Terri Stowers Laura Belcher Andrea Elkins Jay Lazell Mary Leslie Morton Felisha Sutherland Tom Bennett Marlene Elliot Karl Lilly Jake Nichols Melinda Swagger Jeff Billings Manie Fernandez Melissa Lilly Lori Nichols Greg Swagger Nancy Butcher Ryan Frankenberry Gay Logston David Oliverio Brenda Thompson Randy Cain George Freeman Cassie Long Rich Olsen Steve Thompson Brenda Caines Charlene Glagola Dennis Loudermilk Crystal O’Neal John Tice Tracy Campbell Debra Graham Stanley Lynch Melanie Pagliaro Libby Tolley Kristin Canterbury J .R . Harper Deanna Lyons Marilyn Parsons Jo Vaughan Betty Caplan Trina Hartley Sharon Malcolm Rita Pauley Kate White Chris Carney Sheila Harvey Sue Manahan John Price Mark White Albert Carter Margi High Delegate Charlene Marshall Shelda Pritchard Martha White Dugan Carter Janet Hill Allison Massey John Reed Ryan White Lee Cassis John Homberg Josh Mattern Kevin Riffe Lisa Wilkinson Brian Casto Mark Imbrogno Neva Maynor Maureen Robinson Sherry Witt Pricella Coleman Jeff Johnson Randy McCoy Charlie Roskovensky Zach Wisda Michael Cook Bret Jones Steve McElroy Meagan Roskovensky Jared Wyrick Debbie Jones Drew Ross 23 The Council of State Governments Southern Office Southern Legislative Conference 1946 Clairmont Road | Decatur, GA 30033 P O. . Box 98129 | Atlanta, GA 30359

67th Annual Meeting of the Southern Legislative Conference Mobile, Alabama July 27-31, 2013

The 67th Annual Meeting of the Southern Legislative Conference returns to Mobile, Alabama, July 27-31, 2013 . Make plans to join us in Alabama’s Port City for another memorable gathering of policy leaders from across the region .

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